Economic sanctions against some powerful and influential Russians can harm the City. Indeed Russian oligarchs suffer from the fall of their companies’ Stock Exchange prices and that of the rouble. Thus there is the possibility of a huge withdrawal of capital due to the risk of assets freezing, the slow-down of initial public offering and collapse of the sales of British financial services in Russia. Given that the financial sector is not rational the mere threat of sanctions disturbs investments and stock market prices.

Yet it does not explain why the government is so afraid of these potential sanctions. A confidential document was snapped pointing out the UK has no interest in encouraging sanctions. This piece of news underlines the substantial influence that Russian oligarchs have on the banks of the River Thames.

How far does it go?

To get an idea of what’s at stake, the first, second and fifth wealthiest people residing in the UK are Russian or Ukrainian-born, according to the Sunday Times Rich List 2013. Moreover former Soviet states have raised £82.5 billion in London for 20 years and one fourth of all those who received an investor visa (£1 million minimum) are Russians. And it’s not all: these oligarchs have built a tremendously impressive network of influence: they own 70 powerful companies in a variety of sectors, some have a close relationship with heads of British companies, and they also hire the best lawyers and former political champions, one of whom, Tony Blair, still has a lot of clout (he was mediator between Gaddafi’s family and Oleg Deripaska C.E.O. of Rusal).

One can easily imagine why Number 10 would want to balk at the idea of actual economic sanction against Russia…